Starwood's W Steps into China

Zacks

One of Starwood Hotels & Resorts Worldwide Inc.'s (HOT) high-end brands, W, recently made its debut in mainland China with the opening of a hotel in Guangzhou. Owned and developed by real estate developer, KWG Property Holdings, this W property also marks the 44th hotel of the brand worldwide.   

China is all set to bring about a recovery in global tourism and by 2020 it is expected to be the world’s largest travel destination. Starwood looks forward to tap this opportunity. In 2011, Starwood even shifted its management team to China to understand the market more closely through interactions with local stakeholders.

This Zacks Rank #3 (Hold) company is now scrutinizing its opportunities in various untapped but highly populated Chinese cities. We believe, the opening of the latest 317 room-property is a strategic fit as Guangzhou is the third largest Chinese city and the largest city in southern China. Guangzhou is a key transportation and trading hub of the country, which boosts business travel in the area.

Besides, the property is in close proximity to some of the chief cultural attractions in the country and will likely serve leisure travelers. Several other hoteliers including Wyndham Worldwide Corp. (WYN), Hyatt Hotels Corporation (H) and Marriott International Inc. (MAR) have a presence in this region.

Coming to the brand, Starwood set a new trend in hotel designs with its W brand and hopes to have 60 W hotels by the end of 2015. The brand was launched in 1998 in New York. The W brand of hotels, aimed at the young, have a high growth trajectory and are currently present in North America, Europe, Latin America, Asia Pacific as well as Middle East and Africa.

In order to further ramp up its presence in the rapidly growing emerging market of Asia, Starwood remains on the verge of launching 20 new hotels under its W brand in the region over the next five years. These openings will translate into a twofold increase in W’s Asian portfolio. Apart from Guangzhou, Starwood intends to launch the brand in several other Chinese cities like Beijing, Shanghai, Changsha and Suzhou by 2018.
 

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